Scandal-tainted ChuoAoyama PricewaterhouseCoopers, now renamed Misuzu Audit Corp., resumed regular operations Friday, ending a two-month statutory auditing suspension for former employees’ involvement in window-dressing at Kanebo Ltd.

The leading auditing firm hopes to make a fresh start under the new name, but it will have a tough time as many clients switched to competitors when the partial operational suspension began July 1 on orders by the Financial Services Agency.

“I would like to once again apologize for causing trouble,” Misuzu Chairman Hideki Katayama told reporters at its head office in Tokyo.

“All the employees (at Misuzu) are aware of professional ethics and will carry out their duties,” in compliance with the law, Katayama said.

He said the firm has implemented a number of reforms, including a system to review its audit by internal independent accountants.

The Tokyo District Court gave three certified public accountants formerly employed at ChuoAoyama suspended prison terms Aug. 9 for conspiring with Kanebo executives to falsify the ailing cosmetic giant’s earnings in fiscal 2001 and 2002.

ChuoAoyama was the first major auditing firm to be slapped with an FSA suspension order.

The multinational accountancy firm PricewaterhouseCoopers, ChuoAoyama’s longtime ally, set up a new accounting company named PricewaterhouseCoopers Arata in June. The new unit began operations on the same day ChuoAoyama was forced to halt part of its operations.

Since ChuoAoyama’s penalty took effect, the disgraced auditing company lost about 230 corporate clients on its list of 834, as of April 1.

About 65 companies, including Toyota Motor Corp. and Sony Corp., appointed Arata as a temporary auditor.

Although the fall in client numbers is expected to result in a 30 percent decline in sales, Katayama said the company will work hard for the roughly 600 clients that have chosen to stay with Misuzu after September.

The firm not only lost its clients but also many workers.

About 900 employees at the former ChuoAoyama have moved to Arata. Misuzu now has only 2,506 employees, Katayama said.

“Many of our employees have moved to Arata and it indeed affected our business,” he said.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.